According to the latest updates from the UK division of Tiscali, its deal for takeover by Sky Broadband has been cancelled. It is being speculated that the main reason behind the deal’s failure is the unexpected change in market conditions and the falling value of the British pound. The deal was supposed to take place sometime later this month, and it was being said that almost all aspects were settled and only a final stamp of approval was needed.

After this big blow, the company is under major trouble as it is facing astronomical debts of about 500 million. To ease some of the interest payment pressure it has decided to haggle on its loan agreements with the lenders.

A big fear for the company right now is that other broadband providers might use this chance to lure Tiscali’s current customers, by offering them some benefits to switch. The company involved so deep in its troubles may not be able to respond to any such move and end up losing its customers. This will obviously increase the worries for Tiscali, which desperately needs the cash flow that it gets from its current subscribers.

Tiscali has a significant presence in the UK and operates under several brand names such as Pipex, Freedom2Surf and Nildram.